Grandpa Clocks, Inc. (GCI), is a retailer of wall, mantle, and grandfather clocks. Assume GCI sells a grandfather clock for $18,500 cash plus 4 percent sales tax. The clock had originally cost GCI $14,500. Show the accounting equation effects and prepare the journal entries related to this transaction. Assume GCI uses a perpetual inventory system.

1. Indicate the effects of the amounts for the abovetransactions. (Enter any decreases to assets, liabilities, or stockholders equity with a minus sign.)

A: Assets = Liabilities + Stockholders Equity

B: (14,500)